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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (12363)	7/21/2001 1:02:34 PM
From: donald sew	Read Replies (4) \| Respond to of 52237

JULY 20 INDEX UPDATE ------------------------- Short0term technical readings: DOW - upper midrange SPX - upper midrange OEX - upper midrange NAZ - lower midrange NDX - lower midrange/borderline oversold SOX - smack in the middle NAZ NET NEW HIGHs-LOWs - +23 VIX - midrange Over the last 6 days, the trading in the SPX/OEX/RUT has been very tight with the intraday highs within points of each other. Looks like a small rectangle, and rectangles normally take the direction of the trend which for now is down. However, its a small triangle implying a possible retest of the previous lows around 600 on the OEX. Previously, I mentioned that a FALLING WEDGE/FLAG(bullish) was developing since JULY 12. Whether or not its a viable formation, the lower trendline of this formation is around 1625-1600 over the next 2 days. Since my short-term technicals are in the lower midrange it appears there is just enough room in my technicals for the NDX to test the 1625-1600 region, before I get a CLASS 1 BUY signal. Not to say that the NDX cant set a LOWER LOW, but this is the first hint that the NDX could bounce off the 1600 region and that a LOWER LOW may NOT be set. Its just a hint. The NYSE appears to be forming a RISING WEDGE(bearish), but its not a big one and the target measurement is around 600 implying a retest. This may be another hint of just a retest and not a LOWER LOW. Im only talking about a possible hint, nothing firm. The NAZ NET NEW HIGHs-LOWs did decline, but only slightly and is still in positive territory. If the NAZ/NDX continues to decline and the NEW HIGHs-LOWs only drops a little, that may also be a bullish hint to the extent that this decline may not be strong. Another issue with the NAZ NEW HIs-LOs is that with the mid-JUNE and JULY 11 TROUGHS, there was a slight positive divergence. The JULY 11 trough on the index did set a lower low but the HI-LO did not. Also, with my short-term technicals on the NAZ/NDX already in the lower midrange, it is hinting that a HIGHER HIGH could be established in the HI-LO for this specific short-term pullback. This could be a significant bullish development and may support the possibility of a summer rally. Although my short-term technicals are hinting of more decline, there are hints as mentioned above, that this specific short-term pullback may not be that strong and may not set a LOWER LOW. If a LOWER LOWER is NOT set, that does not mean immediately that we should turn overly bullish since the various indices could just be forming a bearish formation like a rising wedge or pennant or rising flag, which all have higher lows. So even if a HIGHER LOW is set, it would better to get further bullish hints/confirmations before becoming firmly bullish. The week after option expiration is commonly a weaker period, which leads into the END-of-MONTH RALLY. Tie that in with the position of my short-term technicals, and Im suspecting a short-term bottom towards the middle/end of the week. In my personal mutual fund account, I closed more of my UOPIX positions(long-NDX), so my hedge is biased to the downside in the ratio of 2:1, with 85% cash(=10% short). So although Im basicly short, its not with alot of conviction. In my trading account I have no short or long positions, other than an old dead option position that I have already counted as a loss, which expires in OCT(heck-it may still come alive and break even). So Im still very heavy in cash. If I see postive divergences in the technicals/market internals, I may increase my position sizes on the long side, in case of a summer rally. Although the media makes a big issue on the summer rally, I just consider it a fairly strong upswing within a larger negative 6 month period(MAY-OCT). Im not predicting, lets see if we get more bullish hints/confirmations to support some sort of a summer rally. Of course if LOWER LOWs are set - that aint good.

To: Lee Lichterman III who wrote (12363)	7/22/2001 4:49:53 PM
From: Gersh Avery	Respond to of 52237

Thanks .. I must compliment you on the volume of work that you have done on your site. It has really grown since you started out your effort. As you've noted before .. it's when the shorts get closed out that the most damage gets done.